Budget Using Only One Month's Income
Having used YNAB 4's "Income for this month" and "Income for next month", I feel like I'm at a loss since moving to nYNAB.
I get paid on the 15th and 30th so in YNAB 4, I would put both of those paychecks in "Income for next month" then on the 1st, I can use that money to budget everything. Then during the month, if I'm moving money between categories, it was really easy to make sure I'm only spending last month's income by making sure "To Be Budgeted" is zero. If I'm under budget, it'll be positive and if I'm over budget, it'll be negative, all without affecting spending or categories for any other month.
With nYNAB, I find this workflow no longer works. I understand that it's trying to make your money more fluid by removing the monthly walls but I feel like I'm in less control than before.
For example, if I'm budgeting after my mid-month paycheck, "To Be Budgeted" now contains both last month's incoming as well as income which is slated for next month. This means I can't use it as an indicator of whether I'm over or under budget and makes it really easy to use money that's suppose to be for next month.
In another words, I think of income as buckets. In YNAB 4, each month had its own bucket and that helps your control spending because the software makes it easy to only use a single bucket per month to fill your envelopes.
In nYNAB, all of the income goes into a single bucket and with that, it makes it hard to only use one month's worth since there's no way to divide it up.
I understand that some people create their own "buffer" category where income goes but I feel like this just adds extra friction and a risk for errors.
Way off topic from the original post, but I also keep 3-6 months (4.5 actually) on hand in case I lose my job. I'm always looking for ways to yield a bit more than a generic savings account. Here are some of the methods I employ:
- Introductory offers to open Checking/Savings accounts. I typically do this with Chase bank because they send either me or my wife a mailer once a year. You are typically required to keep the account open for 6 months and have to do a couple silly tasks to qualify, but it typically earns us about $500/year for ~$20k held for those 6 months which is usually about 2.5% APY (non-compounding). Of course, if I do an average of 2 offers like this per year, then I am actually earning 5%. Regardless, it is still a cash account and earns better than a typical savings/checking account.
- Offers for high yield savings. Occasionally I'll run across a high yield offer of 1.9%+ and it'll be worth it drop the money in that account , but often there is a minimum duration required.
- Short-term loan. I've taken a risk and loaned money to a friend/family where it would have been challenging for the lender to get the cash (unrelated to poor credit).
Lately, I've been considering investing my emergency fund and taking the risk of no short term savings. At this point, I believe that I could handle unemployment with a combination of my framily network, side jobs, credit cards, or other short-term loans (800+ credit score). Thoughts?